Op-Ed: German plans for Greece to leave Euro on March 23
Rumours of a planned forced default by Greece on March 23 are gaining ground, following the leak of a document earlier this week stating all Greek bank accounts will be frozen on that date.
Earlier this week The Slog carried a disturbing report of “a seemingly planned/forced default by Greece on 23rd March 2012.” However the author of the report clearly stated “I still lack concrete proof of the validity and source of the documents held by Wall Street banks in relation” to the forced default.
The report, whilst compelling, was without substantive sources. In light of the continued negotiations between the Greek government and the Troika, this writer concluded that the report was most likely accurate though not necessarily the final plan, but rather a contingency plan to be utilized if Germany received enough support from its EU partners and the IMF.
On Feb 19 the Telegraph also runs with a report of German plans for Greece to exit the euro. It reports “Rumours are already circulating in Wall Street that banks are preparing for a ‘credit event'” adding “The sense that an endgame is approaching has been fuelled by the secret “troika” report, by EU, IMF and ECB officials on Greek debt “sustainability”. Certainly this week has witnessed the lowest point in relations between Germany and Greece since the Second World War, with the Greek President accusing Wolfgang Schäuble of insulting Greece.
The original documents seen by The Slog which was unable to verify the source of the document…
“asserts that Greece will officially be declared in default by all the ratings agencies after the close of business on Friday march 23rd . At the weekend all Greek bank accounts will be frozen, with emergency measures detailed to prevent the flight of capital. Included in the paperwork is a list of very limited exceptions to the ‘no withdrawals’ order. All major banks ‘are instructed not to deal with euro exchange as of open of business in Greece on Monday 26th march. All Greek markets will close for one day ‘at least’.”
The Telegraph now reports that German Finance Minister Wolfgang Schäuble is actively seeking a Greek default, believing that Greece will be unable to reduce its debt enough to stave off bankruptcy. Even if that is Schäubles intent it is by no means a certainty that the plans will come to fruition as other members of the European Parliament are solidly behind supporting Greece, yet lack the influence that Germany carries. Digital Journal reported that a shadow troika had been proposed this week to come up with alternative suggestions to austerity as a means of assisting Greece, with backing for Greece to stay in the eurozone.
On Feb 19 the Slog reported it has received corroborating evidence relating to the authenticity of the document outlining a planned Greek default on March 23. One source is named as Barclays Capital, whilst the other remains anonymous. It is unlikely that the document will receive official corroboration but any further stalling in arranging the bail out loan to Greece will make the chances of the ‘planned default on March 23’ an increasing possibility.